Abstract
Purpose: This study sought to establish the influence of firms’ characteristics as determinants of transient advantage on performance. Specifically, the study looked at the influence of firm age and firm size on the performance of insurance firms in Kenya. Methodology: This study employed descriptive research design targeting all the 19 insurance companies that offer health insurance products as at end of December 2017. Secondary data was collected on the firm characteristics (firm age and firm size) and the performance of health insurance (Gross Weighted Premiums and Underwritten Results). Descriptive and inferential analysis was conducted to show the relationship between the variables. The analyzed data was presented by use of bar charts, graphs and frequency tables. Inferential statistics were done including correlation regression and ANOVA.Results: The study revealed that firm size had a positive relationship between age and firm performance that was statistically significant. The study also revealed that firm age had a positive relationship between age and firm performance that was statistically significant.Conclusion: Age of a company is a quality that has been identified in this study as a factor which enables a company to gain capabilities which enable it to exploit transient advantage. It has been observed that the age of a company enables it to gain experience and learning which makes it able to overcome the effects of a rapidly changing business environment. With time these companies also gain a reputation placing them above their competitors. Age, alone, may not guarantee the performance of a company. Other factors have to accompany longevity for the firm to be able to exploit transient advantages and improve its performance. This can be proven by the fact that there are firms that had been in the sector for over three decades yet they control a small portion of the market share. This may be because the benefits of accumulated knowledge can be overcome by the inertia, inflexibility and bureaucracy brought about by routine, rules and organizational structure.Contributions to theory, practice and policy: The study recommended that firms should form partnerships with other firms to enhance cheaper resource outsourcing and offset the disadvantage which comes with firm age and firm size thus increasing firms’ profitability. It was also recommended that strategic partnerships should be adopted to enhance new market penetration and faster growth due to pooling of resources. It is further recommended that the age and size of an organization must be well supported by agility to enable the firm exploit transient advantages and that firms must use the financial muscle and experience gained over the years to take advantage of waves of opportunity.